FDIC Law, Regulations, Related Acts

4000 - Advisory Opinions

FDIC Prior Approval of the Transfer of Deposit
Liabilities

FDIC-88-28

March 18, 1988

Roger A. Hood, Assistant General Counsel

We understand, from information submitted by our Dallas Regional
Office, that your client, *** assumed some $718,000 in deposits from
*** Bank, an uninsured institution, without obtaining the prior written
approval of the FDIC as required by section 18(c)(1)(B) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(c)(1)(B)). The applicability
of this provision does not depend, as your client seemingly believes,
on the existence of a formal written agreement between the two
institutions to transfer deposit liabilities; it is sufficient that the
parties actively and deliberately cooperated to achieve substantially
the same result by soliciting depositors to transfer their accounts, in
consequence of which (according to the President of *** ) at least
"eighty-six certificates of deposit with an aggregate value of
$718,000 were transferred [from the *** Bank to *** ] without written
deposit contracts or new *** certificates of deposit." To read the
statute as not applying in these circumstances would be to render it a
nullity in substantial part, and is therefore
impermissible.